Would Justin Welby be embarrassed to own shares in my bank?

The financial sector as a whole isn't the most salubrious industry to be in.

Last month, I took out a loan that had an effective APR of 243,333 per cent. But I didn't go to a payday lender to do it. Although the worst of them do offer loans with interest rates in the hundred thousands, a more typical cost of a payday loan is something like Wonga, which cites a representative APR of 5,853 per cent on its website.

No, instead, I took out an authorised overdraft at my bank. I didn't mean to, you understand; a Kickstarter project I'd backed finished, and charged me about £15. The email was caught by a spam filter, and I'd forgotten it was coming, so my mental accounting was thrown out of whack. By the time I found out, I'd been overdrawn by 17p for two days. For that privilege, my bank charged me the princely sum of £2.

Just for comparison, Wonga themselves, the arch-villain of the day, would have charged me a third of a penny, if they did loans that small, though their handling fee would have been much larger.

In my defence, I'm not an entirely ignorant consumer. The bank account I have does have punitively high interest rates if you go slightly overdrawn, but at the same time, it pays me money for being in credit (something you won't find all that frequently these days). When I'm not an idiot, the two balance out to leave me slightly better off.

But it does leave me wondering at how we pick which companies are evil. Justin Welby, the archbishop of Canterbury, today says he is "embarrassed" to discover that the Church has a financial stake in Wonga. On a scale of one to ten, his embarrassment ranks "about eight", apparently. But where would an investment in my bank rank? Or is a bank a respectable institution, above criticism, even when the numbers involved tell a different story?

Part of the answer is that the numbers involved don't, in fact, tell the whole story. Quoting the interest rate for my bank is misleading: a better way of phrasing it is to say "I am charged £1 for every day I have an authorised overdraft between £0 and £500". The only reason why my effective APR was so high is because the amount I "borrowed" was so low. But for payday lenders, there's also other ways to phrase it which are less misleading. Wonga, for instance, charges interest of one per cent for every day the loan is taken out, plus a flat handling fee.

But there's also a question of business practices. It's fair to say that advising students to take out a payday loan instead of a student loan, for instance, is not particularly ethical. But then, neither is systematically selling insurance to people who don't need it and will never be able to claim on it, or lying about how much lending costs you in order to boost your profits. It's the financial sector as a whole which could do with a healthy dose of ethics, it seems.

A sign outside a 'Speedy Cash' cash loans shop on Brixton High Street. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Is defeat in Stoke the beginning of the end for Paul Nuttall?

The Ukip leader was his party's unity candidate. But after his defeat in Stoke, the old divisions are beginning to show again

In a speech to Ukip’s spring conference in Bolton on February 17, the party’s once and probably future leader Nigel Farage laid down the gauntlet for his successor, Paul Nuttall. Stoke’s by-election was “fundamental” to the future of the party – and Nuttall had to win.
 
One week on, Nuttall has failed that test miserably and thrown the fundamental questions hanging over Ukip’s future into harsh relief. 

For all his bullish talk of supplanting Labour in its industrial heartlands, the Ukip leader only managed to increase the party’s vote share by 2.2 percentage points on 2015. This paltry increase came despite Stoke’s 70 per cent Brexit majority, and a media narrative that was, until the revelations around Nuttall and Hillsborough, talking the party’s chances up.
 
So what now for Nuttall? There is, for the time being, little chance of him resigning – and, in truth, few inside Ukip expected him to win. Nuttall was relying on two well-rehearsed lines as get-out-of-jail free cards very early on in the campaign. 

The first was that the seat was a lowly 72 on Ukip’s target list. The second was that he had been leader of party whose image had been tarnished by infighting both figurative and literal for all of 12 weeks – the real work of his project had yet to begin. 

The chances of that project ever succeeding were modest at the very best. After yesterday’s defeat, it looks even more unlikely. Nuttall had originally stated his intention to run in the likely by-election in Leigh, Greater Manchester, when Andy Burnham wins the Greater Manchester metro mayoralty as is expected in May (Wigan, the borough of which Leigh is part, voted 64 per cent for Brexit).

If he goes ahead and stands – which he may well do – he will have to overturn a Labour majority of over 14,000. That, even before the unedifying row over the veracity of his Hillsborough recollections, was always going to be a big challenge. If he goes for it and loses, his leadership – predicated as it is on his supposed ability to win votes in the north - will be dead in the water. 

Nuttall is not entirely to blame, but he is a big part of Ukip’s problem. I visited Stoke the day before The Guardian published its initial report on Nuttall’s Hillsborough claims, and even then Nuttall’s campaign manager admitted that he was unlikely to convince the “hard core” of Conservative voters to back him. 

There are manifold reasons for this, but chief among them is that Nuttall, despite his newfound love of tweed, is no Nigel Farage. Not only does he lack his name recognition and box office appeal, but the sad truth is that the Tory voters Ukip need to attract are much less likely to vote for a party led by a Scouser whose platform consists of reassuring working-class voters their NHS and benefits are safe.
 
It is Farage and his allies – most notably the party’s main donor Arron Banks – who hold the most power over Nuttall’s future. Banks, who Nuttall publicly disowned as a non-member after he said he was “sick to death” of people “milking” the Hillsborough disaster, said on the eve of the Stoke poll that Ukip had to “remain radical” if it wanted to keep receiving his money. Farage himself has said the party’s campaign ought to have been “clearer” on immigration. 

Senior party figures are already briefing against Nuttall and his team in the Telegraph, whose proprietors are chummy with the beer-swilling Farage-Banks axis. They deride him for his efforts to turn Ukip into “NiceKip” or “Nukip” in order to appeal to more women voters, and for the heavy-handedness of his pitch to Labour voters (“There were times when I wondered whether I’ve got a purple rosette or a red one on”, one told the paper). 

It is Nuttall’s policy advisers - the anti-Farage awkward squad of Suzanne Evans, MEP Patrick O’Flynn (who famously branded Farage "snarling, thin-skinned and aggressive") and former leadership candidate Lisa Duffy – come in for the harshest criticism. Herein lies the leader's almost impossible task. Despite having pitched to members as a unity candidate, the two sides’ visions for Ukip are irreconcilable – one urges him to emulate Trump (who Nuttall says he would not have voted for), and the other urges a more moderate tack. 

Endorsing his leader on Question Time last night, Ukip’s sole MP Douglas Carswell blamed the legacy of the party’s Tea Party-inspired 2015 general election campaign, which saw Farage complain about foreigners with HIV using the NHS in ITV’s leaders debate, for the party’s poor performance in Stoke. Others, such as MEP Bill Etheridge, say precisely the opposite – that Nuttall must be more like Farage. 

Neither side has yet called for Nuttall’s head. He insists he is “not going anywhere”. With his febrile party no stranger to abortive coup and counter-coup, he is unlikely to be the one who has the final say.